it be up or down or sideways.
I see beagle has gone off the scale on negative reputation lol did everyone pay him back for dishing out negative rep's ?
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I am looking for another test of 2.40 before this bear market is done ...I have some unfinished business ...lol
Mr B wants it to stay over his coveted 30 SMA ie 2.63 I reckon ....intra day can go below .
But if the market thinks rates are not eventually going sky high then maybe retest of lows will be a higher bottom of say 2.45 or so ...only time will tell
I am with you Alokhdir. It will be interesting to see what happens I think a re-test is likely, we will see.
im in the retest of the lows camp. how can the price of gentailers go up when you can get a term deposit with no risk of over 4% ? i know gne pays more than that but thats because they are a coal burner and an oil play both dinosaur assets with limited life. other gentailers paying less than a term deposit so who ever is investing in them must think there growth assets lol
And I'm in the camp that believes GNE SP is on a rising trajectory. GNE pays a healthy dividend of 6.5% at current SP, with imputation credits raising it to approx 9%. To get a TD rate of 4%, you're locking money away for at least 2 years, and you have tax to pay on that 4%, which reduces the return below 3%.
Then there are other factors. The value of Genesis' oil and gas reserves has just increased significantly. The fragility of NZ power generation has been seen in public twice in the past 10 days. And the importance of thermal generation being part of the medium term energy future is being seen worldwide
Current aluminium prices support Rio Tinto keeping their smelter running past 2024. And electrification of industry is only going to increase. So not likely to be a windfall of power being made available to the market
And power prices in NZ just keep rising. I'm not seeing this change until Lake Onslow is operating and able to arbitrage power prices. This assumes a public good operation rather than a commercial return operation
History shows that buying GNE around 2.50 is always a good buy ...selling over 3.70 is a good sell.
As its purely dividend stock so its the closest Bond proxy u can get here .
CEN / MCY / MEL do have a growth component in SP as they are increasing their EV organically
Your long term worries about GNE due to Kupe and Coal and gas are being addressed by company ...they are transferring their generation to Green option in next 7-8 years so IMO they will keep paying similar ever increasing though marginally dividends . Thus buying GNE is like buying a long term Bond ...it has a coupon rate of 9.5% Gross and its price fluctuates with current rate scene ...coupon of 9.5% covers the equity risk premium too adequately ...as Govt bond is tad lower 4% at AA rating
Also u are underestimating the future growth in electric demand due to transfer of petrol pump business to electric companies via electric cars ...each new electric car is like another house connection in power requirements
For practical purposes I was trying to compare one person house with one car ...which is almost same ...both use appox 4000 KWH per year . Little difference here and there doesn't matter as main point was that they will be main driver of electric demand at the cost of petrol pumps business . Retail oil business will become retail electric business ahead ...slowly it will gain momentum in next 3-8 years .
Here are some numbers from Norway, the leader in EVs. https://cleantechnica.com/2022/06/03...%2C537%20units.
I've been driving around Iceland recently and am staggered by the number of EVs https://icelandmonitor.mbl.is/news/n...on_in_iceland/
NZ should and will get to these sort of numbers eventually but as so often, we are slow on the uptake
hydrogen cars maybe bigger than ev cars in the future so that mean no extra demand for electricity companies
Have a read in todays herald
https://www.nzherald.co.nz/business/...T5HCRRD6423WY/
The last part discusses producing hydrogen in NZ. What is already happening and plans for the future, although currently you might be right about it being imported.
Genesis may not be the best company to do it as hydrogen is only "green" when produced from renewable energy such as hydro, geothermal, wind etc.
"With current tech, electrolysis generally produces hydrogen at about 75 per cent efficiency. So to create a kilo of pure hydrogen fuel, which holds about 39.4kWh of energy, it takes 52.5kWh. By improving electrolysis efficiency to 95 per cent, that means it'll only take 41.5kWh to generate a kilo of fuel"
Before it disappears off the news stands, GNE holders might be interested in grabbing a copy of NZ Geographic magazine for May/June 2022. It contains an article: "Why are we still burning coal?". The article has a current run down on the state of NZ's gas fields, and GNE's biomass trial at Huntly. The fact that Genesis - apart from in 2021 - isn't NZ's worst coal burning bad boy is noted. That title belongs to NZ Steel.
The article ends going into the potential of a hydrogen economy for NZ. The principal scientist of Wellington's Robinson Research Institute, Chris Bumby, has trialed a process making steel using hydrogen rather than coal. We have all heard about Meridian and Contact's proposed renewable hydrogen production plant down south. But this article talks about the "Taranaki H2 roadmap."
The 'Taranaki H2 roadmap plan' is for offshore wind farms and tide turbines to generate electricity which will in turn power hydrogen production plants on old offshore gas drilling platforms, or facilities on shore. This would provide some continuity for workers and otherwise superseded infrastructure as the gas industry winds down in Taranaki.
I found the whole article fascinating. Maybe Genesis's 'legacy gas field assets' in Taranaki have a long term future after all?
SNOOPY
Hey bull, JFAL= Just For A Laugh. I bought 21,000 CEN @ av. price $7.026 on top of what I already own, just for the upcoming div and possibly a quick trade, but because they went up over 30c over the next 3 days, I sold them over 6k profit. Now that is what I call lol all the way to the bank. Am now ready to buy them back and maybe keep them a bit longer for the div or another trade;).
https://www.nzgeo.com/stories/why-ar...-burning-coal/
But does it make sense to turn that "green" electricity to H?
That makes the hydrogen. Then it needs to be compressed or transformed (eg ammonia). Then stored. Then transported. Then stored. Then transferred to the end user. Then converted to mechanical or electrical energy. So the 75% efficiency falls below 60% for electrical energy or 30% for mechanical energy
IMO hydrogen is a waste of energy
W69 ...after todays big move down in bond yields whats your latest GNE SP target based on Bond yields
10 year is down big from top of 4.284 to just 3.723 ....Shud help GNE ?
Started to get a bit nervous thinking how much they might drop after EX div day so sold off 15,000 before ex div and sold another 16,000 on and after ex div and have kept the rest. They sent me a $10,000 div but am down on those trades. A good lesson learnt. But not too worried will get it back trading CEN.:mellow:
Strong day for GNE today. I'm not a technical trader, does anyone know where the next point of resistance is likely to be?
Good buying under 250 eh alokdhir …..even though there was a possibility of it going to 220 if the difference to govt stock was going to be maintained. My apologies if anybody listened and missed out on cheap ones but it’s not my fault punters are happy taking on more ‘risk’ than ever before.
So from here if GNE is seen as a safe haven from recessions / inflation then punters might be excited at getting a 7% gross yield ……jeez share price might get back to 370 odd next year …. big capital windfall for some.
That’ll test a few ‘investors’ resolve (and mine) …..sell and take the big gain (and a divie or two) of more than 50% in my case or just sit tight and collect the 9% pa divie (on purchase price)
Not a problem for those who’ve bought solely for the dividend and will hold forever
Thanks for taking the time to reply and answer my question
I am expecting a very good result to be published next month. Huntly was running solidly in H2 as hydro levels were preserved. And the value of oil reserves has basically doubled. I assume gas value has also risen, but as the gas is stranded in NZ, it won't be directly following LNG prices
I bought on the way down at 258 and 248. Sold a few to lock in a gain, but still sitting on a significant holding which I'm happy to retain for the dividend while watching the SP
Today's trading will be interesting. This stock shows almost zero correlation to Wall Street, so no overnight guidance from there
Great divie yield if buying at the moment and good capital gain as well over next year from todays price
Win win it seems / like can’t lose
Very good buying mate ...my average of a large holding after adding few recently too is $ 2.48 ....Craigs target of $ 3.80 is very possible in 18-24 months ....till then enjoy big dividends ...Cant go wrong with this bond proxy near peak of rates fever ...this is more related with longer term rates like 10Year Bonds and 5 years maybe then short term . With market getting more and more certain of longer term recession and deep also so longer term rates are under check thus GNE SP is well supported
GNE from past shows good buying around $ 2.50 and good selling around $ 3.75 ....it keeps touching both goal posts periodically .
Buy and hold also works as their dividends are pretty reliable and BIG
Just to know your thoughts on this important topic during such high inflationary times mate ....What u think should happen to EV of businesses based on replacement cost analysis ...I am pretty sure to replace the assets of GNE or say any business at present maybe more then double then their present valuations suggest ...Does this play any role in deciding SP targets or only based on DCF etc
Jeez .... Craigs have a target of $3.80 .... and I was only talking 360/370
What can go wrong
Some interesting trading patterns around GNE share price & relative movements against the NZ 10yr bond.
2022 YTD GNE's share price has a negative correlation against the 10 year bond of .682, suggesting a fairly strong correlation that as bond yields move up GNE's share price falls, or as bond yields fall fall GNE's SP rises.
The cumulative correlation has moved around during the year, IE if you measured it from the start of june it would be -0.72, peaking at about -.83 in mid june.
That trading correlation completely broke down from 6 july...with bond yields rising from 3.6% to 3.74%, and GNE's SP rising from 2.71 to 2.82
as an investor not bothered but food for thought from an accumulating or trading pov
swap rates creeping back up again?
That's a pretty strong correlation FM
Think if you ran the numbers since they floated it would be stronger still
My model on monthly closes since IPO shows 10 Year Govt explains nearly 60% of the GNE divie yield .... and my Stats 101 says that's pretty high'
If SP was $ 2.40 when 10 Year yield was 4.284 then it should be around $ 2.78 when yield is 3.70 today ...ie if we had very direct 1to 1 correlation ...its almost same area so nothing much to worry or read as investor ...as SP has some coming dividend also in it ...just 2 months left so around 6 cents accrued ...
alternatively, using 6 july as a base (where the breakdown occurred), when yield was 3.6% rising to 3.74%, would imply a 3.7% fall from the GNE SP as at 6 july, which was $2.71 (or less 3.7% = 2.61). a bit of waffle either way. I just thought the analysis was interesting as I look around at different investment options on the NZX available
I would rather use the extreme end data points for finding correlation as they will be more material ...then any mid range options .
GNE SP did not rise or respond similarly to quick falling of 10 year yields from 4.284 to almost 3.55 ...now its just catching up with its relation to 10 year bond yield .
On that basis todays SP comes to 2.78 plus accrued dividend of 6 cents = 2.84 ....
LOL ....its easy when they match but will have lags both ways as its actual people sentiments involved in two different markets ...while Bond trading is mostly done by pros of banks etc while GNE is retail driven stock which have their own ways of looking at things .
I knows very little how these power companies make money but this seems to be a very good update …yes?
http://nzx-prod-s7fsd7f98s.s3-websit...604/374951.pdf
https://www.nzherald.co.nz/business/...NE4YOGWKRC44U/
Genesis Energy has increased the amount of power it pumps into the national grid with the addition of a new Spanish-built generator for its Tuai Power Station, near Lake Waikaremoana.
The upgrade will boost the remote plant’s electricity production by enough to power an extra 1000 homes. The first of three new GE built generators for Genesis’ 60 megawatt Tuai Power Station was switched on last week after a 19,500 km journey from Bilbao in Spain — two months late due to global shipping delays.
The 26-tonne generator was then delivered by truck 560km from Auckland, finishing at the end of a narrow, winding road from Wairoa.
Up to 55 contractors and staff were involved in removing the old generator, originally installed in 1939, and replacing it with the 2022 model.
The nine-month project was undertaken through various levels of Covid-19 restrictions. Genesis will repeat the exercise next summer and the summer after that as Tuai’s other two generators, built in 1929, are also replaced.
Once complete, the upgrade will have cost $32 million and taken seven years in planning, production and installation.
The project will increase Tuai’s generation capacity by 6 megawatts and will improve its efficiency, the company said.
Genesis’ chief operations officer Rebecca Larking said the project would increase the amount of sustainable generation available to the national grid.
“New Zealand is going to need more renewable electricity as the country moves to a lower-carbon future,” Larking said.
The maths on this doesn't sound flash, unless I've made a calculation mistake
6MW x $50/MWh = $300/hr
X 24hr = $7200/day
X 365 = $2.6M/year
$2.6M/$32M = 8.2% ROI
Unless the generators were at end of life or facing an expensive overhaul. But there isn't much that might need overhauling - bearings and perhaps the turbine buckets
I'm not sure of all the maths xafalcon. I just posted it as I thought it would be of interest to GNE holders (me included).
Someone on another site posted this .... '"at 90% capacity factor and 20 cents per kwh sale price that extra 6 MW would deliver around 10 million of extra revenue a year." Hope that helps.
Today Nz 10 year yield traded as low as 3.44 % closing below 3.50 after long .
At these rates GNE should soon head towards $ 3.00 especially with almost 9 cents divvy round the corner
Recently the gap between GNE divie yield has been shrinking .... as the chart shows it is now the smallest since GNE floated ..... and much lower than the earlier part of the chart when interest rates were similar to what they are currently
To me it seems that this TINA thing is still alive and well ---- punters buying perceived high yields and maybe not be recompensed for 'risk'
For anybody interested if yields reverted to the last 5 year average a GNE share price of $2.50 is still on the cards
be fun when share price gets to $3.50 plus
https://www.stuff.co.nz/business/129...-for-ev-demand
Electricity sector has a new driver of growth ....EV usage and its projected growth ahead
Lets hope its all planned better than this...
https://www.telegraph.co.uk/business...runs-capacity/
GNE share price should go over 3 bucks next week
Good that the relationship between the share price and govt stock rates has broken down recently
Positive sentiment toward electrification is providing a certain amount of buoyancy to the sector stocks but also investors are concerned about a recessionary outlook, thus turning to utility stocks as a defensive strategy...... and of course the high GNE yield is very attractive.
Did Craigs mention a $3.80 share price?
Craigs also had like a $1.40 value for NZK.
IMO relationship is still intact but with markets looking much forward then spot rates u are valuing it with . At present market doesn't expect higher rates or yields to last longer then 6-12 while GNE will be giving 9% yield for ever ahead hopefully
Its a good long term hold for many yield hungry investors and have some place in all balanced portfolios
$ 2.40 was an aberration ...$ 2.60 should have been low corresponding with NZX 10400 levels ...now if markets move up then this also goes up
In 2-3 years time rates should be back to 1% yield levels for NZ Bonds then it should be $ 3.80
On business front also they doing better then before so some growth and better results should help too ...not just the interest rate dynamics
I am expecting some good news on 19th. Retail business has been improving. Oil and gas reserves will be repriced. Huntly once again carried NZ through another dry-year. Rio Tinto expressing desire to keep operating removes future uncertainty. Retail banks have already started reducing mortgage rates, indicating they don't believe RBNZ will raise OCR to 4%.
GNE's SP has risen 25.4 % from its bottom of $ 2.40 ...while market has moved 13% from recent low of 10395
That makes it outperforming it two times almost
I cant find any other liquid and reasonable sized stock doing better then 25 % from its recent lows in June !!!
With almost 9 cents dividend round the corner ...I am expecting it to touch or cross $ 3.10 !!!
Alokdhir …..as my mate Balance would say ‘always good buying innthis 240’s’
did not Beagle bark a lot about these being good value Winner().
Snoopy is not a fan of GNE and he keeps pointing out that it has only 10 years life left in it as by then all its generation assets would have depreciated into dividends
But I think he is too pessimistic about GNE's future ...in 10 years the land and other immovable assets of GNE will be worth more then its market cap with some value still left for EV of its retail business earning about $ 200 m stand alone
That time is going to reveal ....10 years is a long time especially in stock markets
Even if u think of it as 10 years term deposit with 9% gross rate then u get back your $ 2.50 without any growth in 10 years ...its still a great investment
Given that according to some Genesis is eating itself, is taking cash dividends a better option than reinvesting them?
Lake Onslow is the death sentence for Huntly. Once filled and operating (optimistically 10 years time), it will provide the same functionality as Huntly, for a lot less cost. Will it happen? 50:50 I think. Mainly due to the likely change of government next year, with their corresponding lack of foresight/desire to improve the electricity market for everyday consumers at the expense of all generators
Even considering transmission and pumping losses, and including an HVDC upgrade, it still beats Huntly due to zero fuel cost
If Lake Onslow does go ahead, the next 10 years will likely require some significant incentives for Genesis to keep Huntly available
Onslow is a big risk in so many ways .
It would be foolish to rely on this only.
Power is essential .It needs to be guaranteed and instant.
Can Onslow guarantee power-I doubt it .
Will natural disasters stop happening .
will technical problems,transmission, cook strait stop posing a risk ?
As for cost -how many billions will it cost?
who will pay for it-have we got better priorities or are we going to be taxed more to pay for it ?
Relying on Lake Onslow is identical to relying on Huntly, both are a single point source
Hydro is as guaranteed as coal, and can despatch power much more quickly. Only gas peaking generation (not the full Huntly capacity) can match hydro despatch speed
Natural disasters and HVDC are already part of the electricity supply situation. Increasing HVDC capacity (part of the project) will increase redundancy for the vast majority of the time, reducing risk
Ideally Lake Onslow would be built and operated as a public good. This will undo the pricing anomalies that Max Bradford's electricity market reforms created. Yes, these anomalies are good for shareholders, but very bad for consumers small and large (except for NZAS)
Long term infrastructure investment has been lacking in NZ for decades. We can all see and experience the effects of that. The current low interest rate environment is the perfect time for this and many other long term projects to bring NZ back into the upper section of the developed world. NZ government debt is low, our credit rating is high, it's time to start the process
Yes it will increase debt, but it is "good debt" as it yields an asset with a very long lifespan (50+ years) that acheives several goals - reducing thermal generation emissions, provides dry year protection, will reduce power prices to consumers small and large, provides capacity for significantly increased wind and solar generation without grid instability etc
Pumped hydro is well recognised as being a very cost effective storage method. Switzerland just commissioned a plant last month. About 1/30 the size of lake Onslow
Do you put off purchasing a computer because they will be better next year? Of course not. And same with pumped hydro, except the future tech for energy storage isn't guaranteed to eventuate (unlike a better computer being made next year). Relying on possible future tech to solve a problem is not a viable position to take with a critical commodity like electricity. NZ wouldn't have hydro dams if this position was taken by previous generations
But I replied to your original statement, that Huntly would be needed for decades to come. I do not believe this is the case for the reasons I outlined
Some speculation: In the future peoples focus will shift to some other existential threat, and CO2 emissions will be no longer be a concern. In this environment a new coal burning generator is likely, It should be sited isthmus adjacent. Preferably on a west coast site for unrestricted access to cooling water, a direct from ship coal discharge pier for easy access to the nearest politicaly stable supplier, the Hunter Valley in NSW or Queensland coal terminals.
Boop boop de do
Marilyn
100% agree. Burning fossil fuels is simply returning previously captured carbon to its original form - atmospheric CO2. But human lifestyle is built around current and previous climate, and increasing atmospheric CO2 is damaging that lifestyle. Hence the current desire to limit the damage by reducing CO2 emissions
Until that bigger existential threat appears, there will be increasing focus on CO2 emissions. And this drives the need to reduce coal burning, as it is acknowledged as the "worst of the worst". So Huntly is firmly on borrowed time
Any new coal fired power station would need carbon capture, which would change the economics considerably
The primary purpose of Onslow is dry year resilience, replacing the current need for a fossil fuel stockpile to cover the hydro shortfall (as happened last year with Huntley burning heaps of coal). The second benefit is the short term load balancing allowing more renewables to be built.
Your EV may help with the second if it's plugged in at the right time and you don't mind the charge being drained at the right price, but it cannot help with the former.
Wish GNE share price would break through this 300 barrier and head on up to 350
If we do the maths, just on the storage aspect
NZ's cheapest EV is $50k for 45kWh. Call it $1000/KWh
Lake Onslow is 5TWh = 5,000,000,000KWh
So the cost of using EV's to store the same amount of energy as Lake Onslow is $5T (with a T)
Current cost estimate of Lake Onslow is $3-4B (with a B)
Alokdhir - the 10 year govt rate not having any bearing on the GNE share price / yield at the moment. If that correlation was in play indicative share price is about $2.60
The other 40% of factors are in play currently .... profits, market conditions, investor sentiment, TINA etc etc
I'm not on board with your TINA theory
GNE SP slump was at the peak of "doom and gloom". Since then the data indicates RBNZ is unlikely to raise interest rates as high as they forecasted in the last MPS. Wholesale interest rates have fallen dramatically. Oil prices ha dropped significantly. International shipping is freeing up. Employment worldwide is very high. NZD exchange rate is favourable for exporters. GNE had plenty of generation at Huntly due to low SI lake inflows, and high oil and gas prices assist their value. And of course there is a sizable dividend around the corner
So I think SP rebound is based on fundamentals
I was just referring to recent relationship of June lows with 10 years highs ....not your long term one as that includes extended period of ultra low yields due to many factors but mainly Covid shock .
For me as also for RBNZ 2 to 2.5 % OCR is neutral levels so 10 years of 2.5 % is neutral yields not 0.5 % which we saw in early 2021
I feel you are miscalculating costs.
Have you inflation adjusted cost of lake onslow? Allowed for all compensation,resource consents,delays etc
v2g is only a one of many diversified means to cover for power peaks.
The cost is minimal and nothing on government funding-it is born by individual owners of ev and solar who would get a significant return on their investment .
I calculated a similar price in the single figure trillions of dollars to achieve the same storage with Tesla power walls, and a need to install something like 150 power walls per household in NZ to match Onslow's storage. We simply cannot achieve this with batteries with current or near future technology.
Nobody thinks that Onslow can make a reasonable profit doing this job at a build cost of several billion dollars, I do not see anyone making money doing this job at a cost of several trillion dollars.
I have used the latest cost estimate from the Lake Onslow project. It is as accurate as a cost prediction can be. It includes the undergrounding of all infrastructure, which is a significant additional cost to above ground construction. So there is a lower cost option available. However, no amount of cost creep will come anywhere near to bridging the thousandfold gap
By way of comparison of pumped hydro vs battery storage I will offer the following example. I build home storage battery solutions for solar power based on repurposing end of (vehicle) life Nissan Leaf battery modules. My cost to build is $350-450/KWh. This represents an absolute minimum battery storage cost using lithium battery tech. So it us still about 400% more expensive to store energy in a battery than in a lake
Batteries also have a relatively short lifetime compared to hydro. 15 years vs 100 years. Lakes don't mind being full of water for months on end, Batteries deteriorate much more quickly if they are held at a full charge
You are welcome to share your alternative maths if you believe I have made a fundamental mistake
Thank you for your insight.
I now understand your thinking-ie battery storage is very expensive compared to pumped hydro.
I hope you also understand mine-there are alternatives to onslow . Estimates of the cost of think big tend to be hugely under the real costs encountered (which cannot be mathematically calculated as maths require precision )
There are many diverse lower cost alternatives to onslow-you may have noticed the redactions on the latest report for alternative sites of pumped hydro on a smaller scale.
It’s likely some punters will only be interested in divie yields next year …..some say interest rates have already peaked and next year they will be a lot lower than they are now.
Maybe a 6% gross yield will be attractive next year …especially so if it’s coming from a safe utility
On forecast dividends that would give a $3.80/$4.00 share price for GNE this time next year
Seems GNE is.a BUY …a strong BUY at todays price.
don’t know if this is Craig’s thinking but heck they put a target of $3.81 didn’t they ….that’s spooky
If its got 30% upside with high dividends while we wait for the capital gains ...then why its not running like mad ?
MCY seems to be doing better with much lesser dividend yield
Next week it should cross $ 3 and move towards $ 3.10 before its superb results on Friday
That should make W69 happy or no ??